Amid a series of scathing tweets aimed at the Federal Reserve and its chairman, Jerome Powell, the Dow Jones Industrial Average took a nosedive of over 600 points on Monday, marking the worst Christmas Eve trading day in the index’s history.
According to a report from CNBC, the Dow fell below 22,000 on Monday after a 653-point drop, starting out by falling by over 2 percent, recovering most of the losses later in the day, and dropping by more than 2 percent right before trading closed. Meanwhile, the S&P 500 also fell precipitously during Monday trading, dropping 2.7 percent and entering what is known in trading parlance as a “bear market” — a drop of at least 20 percent from recent highs.
Likewise, the Nasdaq Composite Index ticked down similarly on Monday and slipped 2.2 percent, as further noted by CNBC.
Talking about the factors that could have influenced the stock market’s poor performance on Monday, CNBC wrote that the main driver might have been Donald Trump’s recent comments about Federal Reserve chairman Jerome Powell and his reported plans to remove him from his position.
“The only problem our economy has is the Fed,” Trump tweeted on Monday morning, as quoted by Forbes.
“They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!”
Per Forbes, Trump’s “unusual” disdain for the Fed was in full display over the weekend, as the president had reportedly brought up the possibility of replacing Powell with government officials. In addition to this, Treasury Secretary Steven Mnuchin reportedly met with the heads of the United States’ six largest banks on Sunday, looking for signs of “market panic or financial instability” and informing them about Trump’s “growing anger” toward the central bank. Mnuchin, however, took to Twitter on Saturday and denied that Trump had ever considered firing Powell as Fed chairman.
— The Hill (@thehill) December 24, 2018
The continued turnover in the president’s cabinet was cited as another reason behind the bearish market activity, as a number of officials, most notably former defense secretary James Mattis, resigned from the administration in recent weeks. As noted by CNBC and Forbes, Trump ended up firing Mattis two months before the effective date of his resignation due to the foreign policy-related comments made by the retired Marine general in his resignation letter.
Considering the above factors, as well as the good chance that the partial government shutdown over Trump’s border wall will extend into the new year, Forbes opined that Monday’s trading day was a “good gauge of the onset of negativity” about one year after Trump bragged about the stock market’s bullish performance since he took office as president.